(Reuters) - The World Health Organization (WHO) called for stiff regulation of electronic cigarettes as well as bans on indoor use, advertising and sales to minors, in the latest bid to control the booming new market.

In a long-awaited report that will be debated by member states at a meeting in October in Moscow, the United Nations health agency on Tuesday also voiced concern about the concentration of the $3 billion market in the hands of big tobacco companies. "In a nutshell, the WHO report shows that e-cigarettes and similar devices pose threats to public health,"

Douglas Bettcher, director of the agency's department on non-communicable diseases, told a news briefing in Geneva. The uptake of e-cigarettes, which use battery-powered cartridges to produce a nicotine-laced vapour, has rocketed in the past two years, but there is fierce debate about the risks. Because they are so new, there is a lack of long-term scientific evidence to support their safety, and some fear they could lead to nicotine addiction and tobacco smoking. "We must emphasise that the onus of responsibility for showing safety, for answering many of these questions, must be on the companies and the industries owning them," Bettcher said. "The reports finds, at this point in time anyway, that there is insufficient evidence to conclude that e-cigarettes help users to quit smoking or not. The jury is still out," he said.

The European Union has already agreed to requirements around advertising and packaging to ensure the safety and quality of e-cigarettes. The U.S. Food and Drug Administration has proposed banning sales to anyone under 18 but no curbs on advertising.

Activists welcomed the WHO recommendations. "As Big Tobacco corners the e-cigarette market, it is using e-cigarettes as a global PR scheme to gloss over its tarnished image, positioning itself as a 'solution' to the problem it drives. In reality, the e-cigarette industry is taking advantage of the regulatory vacuum to employ the Big Tobacco playbook to hook a new generation on its products," said John Stewart of the U.S.-based group Corporate Accountability International.

Regulatory Options

The WHO launched a public health campaign against tobacco a decade ago. The WHO Framework Convention on Tobacco Control, which entered into force in 2005, has been ratified by 179 states, although not the United States.

There are 466 brands of e-cigarettes, and the industry represents "an evolving frontier filled with promise and threat for tobacco control", the WHO said in the report.

It urged a range of regulatory options including banning vending machines in most locations and preventing e-cigarette makers from making health claims, such as that they help people quit smoking, until there is hard evidence.

Smokers should use a combination of already approved treatments for kicking the habit, it said.

While e-cigarettes are likely to be less toxic than conventional ones, the WHO dismissed the idea that e-cigarettes merely produced "water vapour", arguing they exposed bystanders and non-smokers to nicotine and other toxic substances.

Dr. Armando Peruga, of the WHO's Tobacco Free Initiative, said the contents of e-cigarettes vary but that the aerosol expelled by their users contains nicotine, which is known to alter brain development, and other toxins. "There are brands for example that contain formaldehyde, which is a cancer-causing element, at the same level as some cigarettes," Peruga told reporters. "Depending on the brand, some studies have found that they contain heavy metals, for example cadmium which is completely a cancer-causing agent," Peruga said. Others have been found to contain nickel or acrolein, a respiratory irritant, he said. Their use also posed a threat to adolescents and the foetuses of pregnant women, the WHO said.

Bacon to bubble gum

One concern is that e-cigarettes may tempt children, and the report called for a ban on flavours until there was proof they did not attract adolescents. E-cigarettes can be customised with flavours ranging from bacon to bubble gum.

Scientists are divided on the risks and potential benefits of e-cigarettes.

One group of researchers warned the WHO in May not to classify them as tobacco products, arguing that doing so would jeopardise an opportunity to slash disease and deaths caused by smoking.

Opposing experts argued a month later that the WHO should hold firm to its plan for strict regulations.

Major tobacco companies including Imperial Tobacco (IMT.L), Altria Group (MO.N), Philip Morris International (PM.N) and British American Tobacco (BATS.L) are increasingly launching their own e-cigarette brands as sales of conventional products stall in Western markets.

Two major national producers, China Tobacco and Indian Tobacco Company, have recently become producers, Bettcher said.

A Wells Fargo analyst report in July projected that U.S. sales of e-cigarettes would outpace conventional ones by 2020.

A BAT spokesman said overly restrictive regulations could prevent smokers from being aware of a less risky alternative to smoking, and "this can only be bad thing for public health".